In a surprise appearance during the company's quarterly earnings call, Apple's chief executive Steve Jobs hailed the success of the iPhone and Pod while painting a bleak outlook for RIM's Blackberry smartphones, Google's fragmented Android smartphone platform, and the coming trickle of 7inch tablets.

"As most of you know," Jobs said on Monday's conference call, "I don't usually participate in earnings calls since you're all in such capable hands. Â*But I couldn't help dropping by for our first $20 billion quarter. Â*I'd like to chat about a few things and stay for the Q and A."

RIM Shot

"First, let me discuss iPhone. We sold 14.1 million iPhones in the quarter, a 91% unit growth over year ago and way ahead of IDC's estimate of 64% growth for global smartphone market. Â*

"It handily beat RIM's 12.1 million Blackberries sold in their last quarter. Â*We've now passed RIM.Â*I don't see them catching up with us in the foreseeable future. Â*It will be a challenge for them to create a mobile software platform and convince developers to support a third platform."

Google's fragmented Android

"What about Google? Eric Schmidt said they're activating 200,000 devices per day and 90,000 apps in their store. Apple activating 275,000 iOS devices a day on average for the last 30 days with a peak of 300,000 per day on some of those. There's 300,000 apps on App Store.

"Unfortunately there's no solid data on how many Android phones are shipped each quarter. We hope manufacturers will start reporting it, but it's not the case now.

"We await to see if iPhone or Android was the winner in most recent quarter. Google loves to characterize Android as open and iPhone as closed. We see this disingenuous and clouding the difference. Â*

"The first thing we think of when we hear open is Windows, which is available on a lot of devices. Unlike Windows, where PCs have the same interface, Android is very fragmented. HTC and Motorola install proprietary user interfaces to differentiate themselves. Â*The user left to figure it out. Â*

"Compare this to iPhone where every handset works the same. Twitter client TwitterDeck [sic] recently launched their Android app, and had to contend with 100 different versions of software on 244 different handsets. Â*That's a daunting challenge. Â*

"Many Android apps work only on selected handsets, or selected Android versions. This is for handsets that shipped 12 months ago. Â*Compare with iPhone, where are two versions to test against, the current and most recent predecessor."

Android stores fragmenting

"There will be at least four app stores on Android which customers must search among to find the app they want and developers will have to work with. This will be a mess for users and developers. Contrast this with Apple's integrated app store. Has three times as many apps and offers developers one-stop shopping and get paid swiftly.

"Even if Google was right and the real issue was closed vs open, it's worth remembering open doesn't always win. Look at PlaysForSure. Even Microsoft finally abandoned this open strategy in favor of copying Apple's integrated approach with the Zune, leaving their OEMs empty-handed.

"In reality we think the open vs closed argument is just a smokescreen to try and hide the real issue which is: what's best for the customer, fragmented or integrated? We think Android is very fragmented and becoming more fragmented by the day. We prefer integrated so the user doesn't have to be the systems integrator.

"We think this is a huge strength of our approach vs Google's. Â*We think integrated will trump fragmented every time. Â*We think developers will be more innovative by focusing on one handset, rather than testing against a lot of hardware. Â*No matter how many times Google tries to characterize it as closed, we are confident iPhone will triumph."

The avalanche of 7 inch tablets

Jobs then addressed the "avalanche of tablets poised to enter the market," noting that there are really "only a handful of credible entrants. They use 7 inch screens rather than iPad's near 10 inch display.

Pointing out that "screen measurements diagonal," Jobs explained that a 7 inch screen was just 45% as large as the iPad. "This size isn't sufficient to create great tablet apps," Jobs said, extinguishing any hopes for a smaller sized iPad.

Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted.

Noting that all tablet users already have a mobile smartphone, Jobs indicated that tablets need to be big enough to be differentiated from mobile devices in terms of features. "No tablet can compete with mobility of a smartphone. Pocket size tablets are tweeners," Jobs said; too big for a smartphone and not big enough to work well as a tablet.

Tablets running Android against Google's recommendation

"Nearly all of these tablets use Android. But even Google is saying don't use Froyo [the current release of Android OS], and instead to wait to use next years' version. What does it mean when a software maker says not to use their release and you use it anyway?

The new crop of tablets will have near zero apps.

Finally, Jobs noted that "our potential competitors [in tablets] are having a tough time coming close to iPad's pricing. iPad incorporates everything we've learned about building high value products. We create our own A4 chip, software, battery chemistry, enclosure, everything. This results in an incredible product at a great price. The proof will be in the pricing of our competitors' products, which will offer less for more.

"We think the 7 inch tablets will be dead on arrival, and manufacturers will realize they're too small and abandon them next year. They'll then increase the size, abandoning the customers and developers who bought into the smaller format," Jobs predicted.

Jobs stayed to provide answers to analysts' questions, joining chief operations officer Tim Cook and chief financial officer Peter Oppenheimer. Note that Jobs' comments above are in some cases paraphrased, based on rapid transcript notes made AppleInsider's transcriber and by the author.

Over and over again during the call today, Steve emphasized Apple's ability to deliver a better product at a lower price. In the computer world, there's clearly a perceived premium to buying an Mac versus a PC. However, two things seem important to Steve:
1. Apple isn't in this same position with iPhone and iPad as it is with Mac.
2. He wants to stay out in front of any perceived 'Apple Tax' on these products.

As iPod showed, when you dominate the supply chain and design, manufacture, and develop a consumer electronic product - you control the costs in ways others cannot.

Missing from the call - any mention of the 'Halo effect'. I suppose it's just too obvious at this point. Clearly - the halo is big and bright.

"Compare this to iPhone where every handset works the same. Twitter client TwitterDeck [sic] recently launched their Android app, and had to contend with 100 different versions of software on 244 different handsets. That's a daunting challenge.

"Many Android apps work only on selected handsets, or selected Android versions. This is for handsets that shipped 12 months ago. Compare with iPhone, where are two versions to test against, the current and most recent predecessor.

In all fairness, Even though those are the only two iPhones being sold, App developers would need to test against all devices running iOS 4.x, which would be 3 different versions due to performance variances, and the iPad if they are to make it Universal. While storage capacity wouldnt need to be tested for, it would behoove a developer to verify that it works the same on the iPod Touches even though its performance, display resolution and dimensions would be inline with the iPhone models that came a few month prior.

Quote:

Originally Posted by Daniel001

Steve, you're running the second largest company in the world, you really don't need to bitch like this.

Youre right. He should simply shut his mouth after saying he know what they need to do to fix their problems and how much he charges for this advice.

Seriously, I wish more CEOs acted like Steve instead of being bobbleheads that dont have a clue about technology, want to delegate any and all confrontations, and work to boost a company for a short period before bailing with a huge severance package and a better offer from another company. The bottom line is hes right, and if one hates Apple, their products and Steve Jobs, they should thank him for making you Windows PCs, smartphones, etc. better for their efforts in the market.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Agreed, but if you listened, his tone was very whiny when talking about the 7" form and the google problem of oem's doing proprietary things to android.

He is correct of course, but the tone was whiny.
At the ATD interview he sounded like a guru ... here he was whining.

I think a lot of people interpret Steve's tone of whining with a slightly defensive stance. Apple is constantly bombarded with people who think the products they offer are over priced for no reason. "I can get a dell with the same specs for half the price" is what I hear ALL day long... I can only imagine what Steve hears.

I think if you take what has happened in recent days (dinner with Mark Z., seen walking around and having lunch with Eric S.) I think you'll put the pieces together and realize that while Apple is in competition with these people, he still has a repore with them.

I just keep in mind that while Apple are considered premium devices, there is a whole eco-system that you buy into if you are wiling. One that allows you to let go and enjoy the ride with little fear things will go wrong and great confidence that you'll be safe on that ride.

I've noticed that people who get Androide based phones are happy with them. But if I asked would they have gotten the iPhone given the chance, 100% of them said yes. Most are on VZ some are on Sprint, it's just not there, but if it was, they would have bought one.

VZ is going to get the iPhone soon, and that my friends is going to be one hell of a crazy day. I might just hang out around the Apple store just to see the MASSES come out to finally get what they have been waiting for.

My prediction...... Take all the people who came out for AT&T/iPhone Day One launches and times it by three and that's what you'll get on the VZ/iPhone Day One launch. It's gonna be a site to see.

"Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted."

I had that problem with my iPod touch and quit using it after a month or so. Seems like a weird thing for Jobs to say.

"Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted."

I had that problem with my iPod touch and quit using it after a month or so. Seems like a weird thing for Jobs to say.

I agree with that.

Did he forget that people are doing just fine on his 3.5 inch screen?

I bet he was checking email on his iPhone while making that comment. :-)

"Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted."

I had that problem with my iPod touch and quit using it after a month or so. Seems like a weird thing for Jobs to say.

He wasn't talking about phones / itouch sized devices, they are suppose to be small. He was talking about tablets., that's kind of the point

"Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted."

I had that problem with my iPod touch and quit using it after a month or so. Seems like a weird thing for Jobs to say.

The iPad and iPhone/iPod touch UI elements are different. The point he was making is that a tablet means a different UI than a phone and small form factor tablet just won't work. If you have an iPad you'll know exactly what he means.

Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted.

Ahem:

I agree with having bigger screens, they just need to apply it consistently. I think it's good they have dismissed the 7" iPad but that 10" still needs to be lighter IMO.

As for the other comments he made, the other companies are making similar comments and did so first trying to make out that Apple are the dominant control freaks stifling everyone else. If they're not happy about it, they are free to make a better product (singular).

In all fairness, Even though those are the only two iPhones being sold, App developers would need to test against all devices running iOS 4.x, which would be 3 different versions due to performance variances, and the iPad if they are to make it Universal. While storage capacity wouldnt need to be tested for, it would behoove a developer to verify that it works the same on the iPod Touches even though its performance, display resolution and dimensions would be inline with the iPhone models that came a few month prior.

This is a very good point. Developers also have the problem of keeping backword compatability ... especially on the 3G's that have much less memory and no ability to multitask.

There is even the added problem of the xCode versions coming out without the ability to compile back to 3.0, so when designing to 4.0 features what will happen to 3.0 iOS 3g phone, or even older phones ... well that needs to be tested.

But i'm sure you would agree that these problems will not come close to the issues Mr Job's raised on Motorola doing their thing with android and HTC doing their thing with android. Also all those app stores are going to add much confusion.

Steve, you're running the second largest company in the world, you really don't need to bitch like this.

I agree. I thought it was embarrassing. I've always admired people who build themselves up by doing well, not by tearing others down. It seemed unnecessary and uncharacteristic, like a teenager awkwardly telling the girl he wants to like him what's wrong with all the other boys in the class.

I think some observers are gonna wonder what's going on with him. Maybe I've got it wrong.

On a different note, about iPad sales missing predictions: Steve says he thinks that with that product, the company "has a tiger by the tail". So I'm not real concerned about it.

I think a lot of people interpret Steve's tone of whining with a slightly defensive stance.

Oh I agree, don't get me wrong, I think he is spot on target. I just remember him talking to mossburg and company on Flash and he nailed it, not by being whiny or defensive in stance ... but buy being the technical guru he is.

Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted.

Use two styluses like chop sticks to do a pinch.

Nah, we wouldn't be cruel enough to plant this idea at Microsoft, would we...?

I bet he was checking email on his iPhone while making that comment. :-)

AI should have included the full quote. What Steve said about sanding down finger points makes much more sense when taken in the full context.

Steve is explaining how a 7" screen is only 45% the size of the iPad screen. Then he mentions how some thoughts are to simply increase the resolution (to have roughly the same number of pixels as the iPad).

Steve's point isn't pixel count though. His point is the physical size of the UI elements on the screen. With only 45% of the screen real estate, you don't have nearly as much room for your UI. If you just shrink everything down (with smaller pixels) that's when you would need your finger points filed down. Anyway, it all makes perfect sense when listened to in the full context. AI should have done a better job on that quote.

And yes, the iPhone 4 has smaller pixels (and higher resolution), but the UI elements (icons, buttons, text fields, etc...) are the same physical size. Even if a 7" tablet has the same resolution as a 10" iPad, the screen real estate just isn't there.

This is a very good point. Developers also have the problem of keeping backword compatability ... especially on the 3G's that have much less memory and no ability to multitask.

Developers don't have to worry about multitasking. The OS take care of everything.

Quote:

There is even the added problem of the xCode versions coming out without the ability to compile back to 3.0, so when designing to 4.0 features what will happen to 3.0 iOS 3g phone, or even older phones ... well that needs to be tested.

Developers can compile their apps to run on any version they want, including iPhone OS 3.0. Apple made it real easy for developers to identify the device and features. A good developer won't have any problem in that area.

Steve, you're running the second largest company in the world, you really don't need to bitch like this.

Since when are Americans the whole bloody world? World-wide, Apple's at best (considering the latest info) 5th in terms of profit and 65th in terms of revenue. A good "Job" all-in-all, but let's not exaggerate.

He wasn't talking about phones / itouch sized devices, they are suppose to be small. He was talking about tablets., that's kind of the point

I'm sick of saying this already, but everyone is just not noticing how senseless his remarks are. Jobs is saying 7" tablets are not viable because they are too small to have a good UI, but the iPhone is smaller and has a good UI. It's just not a sensible argument.

"We think this is a huge strength of our approach vs Google's. *We think integrated will trump fragmented every time. *We think developers will be more innovative by focusing on one handset, rather than testing against a lot of hardware. *No matter how many times Google tries to characterize it as closed, we are confident iPhone will triumph."

"Jobs then quipped that small form-factor tablets will need to ship with sandpaper so users can file down their fingers to the point where they can hit smaller targets on the screen. Elements can only get so small before users can't perform these types of touch and pinch gestures, Jobs insisted."

I had that problem with my iPod touch and quit using it after a month or so. Seems like a weird thing for Jobs to say.

Yep. My thoughts exactly. He was saying that the iPod Touch is too small to use well. But he didn't realize it? His comments seem ill-advised and unscripted.

Bitter much? Your feelings hurt that Apple is kicking the crap out of Samsung and LG? I'm a Korean-American, by the way.

Samsung makes their "A4". I don't think you knew that.

Jobs becoming vocal like this only proves that he's VERY worried about other competition. To use words like "fragmentation" over and over again makes me laugh at him, when developers in his marketplace are already fragmented and frustrated.

Jobs v2.0 will be on his way out again soon. At this rate, it shouldn't take very long.

Agreed, but if you listened, his tone was very whiny when talking about the 7" form and the google problem of oem's doing proprietary things to android.

He is correct of course, but the tone was whiny.
At the ATD interview he sounded like a guru ... here he was whining.

I haven't heard the transcript yet, but I will. I would say, however, that I find Steve's style of speaking, and his facial expressions when giving his viewpoint, are more akin to somebody who is amazed that not everyone else"gets it", especially when it's so "obvious" to him. This is somewhat typical of a true genius .... slightly impatient ... as their thinking is way ahead of most of us. I can easily see where this might come off as bitching.

Blowing out another person's candle does not make our candle burn brighter - author unknown

Steve's point isn't pixel count though. His point is the physical size of the UI elements on the screen. With only 45% of the screen real estate, you don't have nearly as much room for your UI. If you just shrink everything down (with smaller pixels) that's when you would need your finger points filed down. Anyway, it all makes perfect sense when listened to in the full context. AI should have done a better job on that quote.

And yes, the iPhone 4 has smaller pixels (and higher resolution), but the UI elements (icons, buttons, text fields, etc...) are the same physical size. Even if a 7" tablet has the same resolution as a 10" iPad, the screen real estate just isn't there.

Well said.

Quote:

Originally Posted by mdriftmeyer

Agreed. Steve sets the record straight and presents a coherent and proven vision.

Definitely. One can't help but lol at those complaining about "bitching" when competitors spend entire conferences taking swipes at Apple. Steve certainly is entitled to a right of reply, and as you say, he's simply putting the record straight and presenting his take on what Apple are endeavouring to achieve.

Since when are Americans the whole bloody world? World-wide, Apple's at best (considering the latest info) 5th in terms of profit and 65th in terms of revenue. A good "Job" all-in-all, but let's not exaggerate.

I think he was referring to market cap, not revenues or profits. Apple is indeed the second largest company in the world in market capitalization behind Exxon. Apple surpassed China Petro several weeks ago which, until then, had been number two in the world in market cap.